Swot Analysis Of Corporate Governance

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Corporate Governance Cadbury Committee define it as “the system by which companies are directed and controlled” Sebi committee (India) define it as the acceptance of management of the alienable rights of shareholders as the true owners of the corporation and that they are trustees. It’s about commitment to values, ethical business conduct, and distinction between personal and corporate funds in Management of company. FRC on Corporate Governance Governance is the responsibility of boards of Directors. Appropriate governance code is though appointment of board and auditors by shareholders. Board’s responsibility is to set company’s strategic aims, provide leadership to put them into effect, management supervision and report to shareholders on stewardship. Thus governance is premiered on what board does, how it sets values of the company and that it is distinct daily operational management of the company. (1992) Cadbury Report - Report of the committee on the financial aspects of corporate governance Committee set up by Financial Reporting Council chaired by Sir Adrian Cadbury and this report Issued in December 1992. It centred on performance and rewards of boards. Resulted in board greater transparency, accountability and recommended board should have three Non-Executive Directors (NEDs) and an Audit Committee. The role of the Audit Committee was to oversee control of financial reporting. Chairman and Chief Executive Officer held by separate directors, also Executive Directors’ contracts should not exceed three years without shareholders’ approval. (1995) Greenbury Report - Director’s remuneration: report of a study group chaired by Sir Richard Greenbury Report by Sir Richard Greenbury sought to amend teething issues around re... ... middle of paper ... ...ed by Sir Robin Smith in July 2003, recommending Audit Committee comprise at least 3 (NEDs). It required at least one Audit Committee member to have recent relevant financial experience and provision of suitable and timely training of members. Monitor integrity of financial statements, review financial controls, internal audit function. The audit committee to have powers to recommend to board, external auditor appointment and monitor and review their performance and independence. (2003) Combined Code on Corporate Governance Published by the FRC in July 2003 but effective 01 November 2003.Incorporated the Higgs and Smith reports. Open and rigorous appointment of directors. Improved induction and training of (NEDs). Half of Audit and Remuneration committee members of FT350 companies should be (NEDs) and not serve more than 9 years cause of independence impairment.

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